On Monday, investors are seeing CarMax (NYSE: KMX) shares rising by 1.4%. This followed a lukewarm earnings report. CarMax reported mixed results for Q1 FY2025, with $7.1 billion in total sales, marking a 7% year-over-year decline. Despite this overall decrease, the company saw some positive trends, which may be what drove the upward share price momentum. Its earnings-per-share for Q1 was $0.97, slightly higher than analyst estimates of $0.95 on revenue of $7.093 billion. Income from CarMax Auto Finance was up by 7% compared to the previous year. The company’s used-saleable inventory increased by 5%, while total used inventory dropped by 4%. The used vehicle seller sourced a record 35,000 vehicles from dealers, indicating a diversification in vehicle acquisition strategies.

What's New With Carmax?

The auto seller is implementing several strategic initiatives to drive future growth. In addition to expanding its vehicle-sourcing capabilities, the company also plans to launch in new markets and improve customer omnichannel experiences. CarMax is also looking at areas where they can reduce costs. They're also exploring a non-prime securitization program, which executives believe could significantly boost value. They anticipate low single-digit growth in gross profits. One positive news item for the company is that CarMax was not affected by the CDK cyberattack. This software technology, which is used by major dealers like General Motors, was recently hacked, causing multiple-day outages for many car dealerships.

Is It Time To Dive In?

This year has been a bumpy ride for CarMax investors. Starting at $76.2 on January 2, shares rose as high as $87.11 by the end of March. However, this could not be sustained. By mid-April, KMX was down to $67.91, and although it rose back up past $75 a share, it hasn’t come close to its previous high. Analysts still rate the stock as a consensus Moderate Buy with a 12-month price target of $77.38. The low estimate is $50, while the high estimate is $105. This wide variation in price targets indicates a difference of opinions when it comes to CarMax’s future prospects.

Neither Julie Stoller nor Stocks.News have positions in this company.